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Really afraid to trade?
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Really afraid to trade?

  #101 (permalink)
Elite Member
Fairbanks, Alaska
 
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bluemele View Post
Hey TraderDuck,

It was nice talking to you the other day. Still letting your concept roll around some in my head.

I am curious, but I prefer to do market replay instead of historicals because the MACDBB can move SOOO much already. Henry and Horst, and Danielle all swear by it, but to me if a MACDBB moves 1 cm on that darn chart by the time it closes, that sure is a different look. So Market Replay is really good to look at for me.

I use what I learned with Nexgen-that there is a progression to follow to move toward live trading. Good success must be made at each step before moving on to the next. You have to really master each step. The more time spent at each step, the better trader one is going to be. I do hundreds of trades at each step before moving on. The sequence is:
(1) Define the entry rules for a trade.
(2) Do Historical Chart Marking where you mark trades from the middle of the chart. You get to see what happend before and after as you mark up a trade. To me, this is the most important step and the one people skip past. Whenever I am having trouble, I go back to this step. Sometimes I do it just for fun. This is the key to developing a precognitive vision of the market.
(3)Do Bar by Bar chart marking where you paper trade the right edge of the chart moving the chart one bar at a time by hand.
(4) Trade with Market Replay. Ninja is great for this. It looks like and feels like live trading.
(5) Do Live Market Sim.
(6) Go to Live Trading with real money.
Each one of these steps is important and must be done in sequence so that you build a foundation. With Historical and Bar by Bar you move through the market very quickly. You can do a weeks worth of the market it in one afternoon. Therefore, you gain more experience in a shorter period of time. As you progress to Replay, it get harder, but you now have experience to build from. Jumping ahead before you are ready for the next step creates confusion and the precognitive vision never gets developed. This is what I've been taught. I had to fail miserably before I accepted and adopted it. But, of course, I'm just an odd Duck. So it may be different for you. Quack!

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  #102 (permalink)
Trading Apprentice
Tallinn, Estonia
 
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Lessons of life

Hey all,

Great to read that I am not the only one experiencing frustration or fears of losing and hence are afraid of "pulling the trigger". Most of the posts contain valuable lessons, but I believe that the conclusion here is that everyone of us needs to make the same mistakes again and again. Of course, going through these posts, I learned from other people´s lessons as well but I am not too convinced that these will be remembered and avoided as well as the mistakes I make myself. People (like myself) tend to believe, what do these guys know, I will prove them wrong, I am different.

I have been live trading for only 6 months so far, so I am very new at trading and there is no doubt I will be able to make many mistakes in the future. My start can be described as the worst possible (but reading "classic" cases of failure, quite typical, I guess). I demo traded for 1 month and made 10k from 500$. Great, trading is simple as that, I wonder why aren´t all people trading and driving Ferraris, people are strange (read: stupid) indeed. This made me think I am invincible, a natural talent in trading etc etc. However, as soon as I started trading live, my account went broke several times in a row (of course, believing that once or twice was only a coincidence ).

After my 3 first months in trading and negative account balance, I started believing that there is little more to trading that I had thought so far. During the last 3 months I have been trying to find the Holy Grail of trading, perfect set of indicators, entry and exit criteria etc etc. What the situation is at the moment is that I trade on the verge of parity, most of the time my profits cover my losses and some more. Some weeks I end up losing, some weeks I end up with a profit.Why is that, you ask. Answer is simple, I do not trade consistently and I do not trust my own system. When I take the trade according to my own rules and principles, I lose and stay out of next three trades that met my criteria perfectly and would have earned me profit. Basically, I trade mainly the times that the market is behaving against the odds or against the way it has most often acted in the past. After losing, I get back to demo trading just to find my system works. One would ask now, why do you keep doing this to yourself. Well, actually I figured all this out last week . I do not claim that with this knowledge I will be a gazillionaire but it is just another lesson for me that I need to get my head fixed, nothing else is important as that.

So, I have not reached my destination yet but so far all of the previous has not been able to scare me off. I still continue to trade, I see light at the end of the tunnel .

But the bottom line is that I agree with people who say you can demo trade for years but if you do not have your account funded by (a huge amount of) the money you can afford to lose, there will always be a huge difference in your psychological attitude regarding demo vs live trading.

Actually it was quite interesting to write all this down and some things seem unbelievable reading them now but all the more makes me believe in my title, the blogs and books do not teach, life teaches.

Cheers!

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  #103 (permalink)
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stay in the game,learn from your mistakes and move on.you will be profitable consistently
some day and you will remember those days and laugh.we all have been there,busted some accounts
but we are still here.we are alive.

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  #104 (permalink)
El "Infienno" existe
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Never give up, tomorrow is another day

Hello:


I'm not fluent, but i understand very well your feelings.

I was depleted my account 2 times, and i think that i must learn all i can about

me more than a system.

I was buyed expensive systems and my friends makes money and i was lost a bigˇˇˇ

And i stay here trying understand better, keep practicing and trading very little sizes but real

paper only good for try new systems.

Good trading

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  #105 (permalink)
Logician
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When you trade with a methodology you know is robust, debilitating fear is no longer a factor. If you are trading without a proven methodology, you should know that your brain is simply trying to protect you from yourself. Do you have a profitable methodology? If so, then wade into the waters with one contract. If you do not have a proven methodology, then shift your focus to finding one, or better yet, developing one on your own. When one understands why they are trading and what they expect, emotion is much smaller road block. Confidence emerges from making the money that you already know will come in advance.


nillz123 View Post
OK. So I know there has been a thread about fear and greed . . . what advice would you give to someone who loves to trade but is deathly afraid to trade LIVE because of previous losses. How do you ever regain confidence from losses?


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  #106 (permalink)
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to the original question. I say you just really take down your size and have an account to handle it. Make sure you've tested well and you should be fine. You simply have to just keep at it.

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  #107 (permalink)
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To the original question: My advice would be that you should use a tight risk management, 1-2%.
Make sure that your trades' stop loss are equal to 1-2 % of your account.
Like 15 pips = 1-2%
or 80 pips - 1-2%

Next, you should look for trades with at least a 1:2 risk:reward ratio scenario.
Lastly, move up to a higher tf, if you're not profitting, go ahead and move up to a higher TF, 4H or Daily charts, if you will, the market is less volatile there and things will often go your way.

With a 120 stop loss on the daily chart for example, dont be scared or afraid, like I said, Make it like 120 pips = 2% of account So you're still losing the same amount of money but earning more.

This way, the amount you lose is constant, but the amount you gain is different.

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  #108 (permalink)
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Automated trading is your solution

If your strategies work than you'll be able to back-test them and auto-trade them. Back-testing is the ultimate solution to fear, after seeing your strategy trade thousands of times on historical data you gain confidence in it, and then automated trading takes care of the rest.

I highly recommend you start backtesting and auto trading via NinjaTrader or if you're not a programmer both TradeStation and IQBroker are monsters in back-testing and have easier languages you can quickly learn.

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  #109 (permalink)
Elite Member
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Back Test Back Test Back Test

Back Test until the cows come home....only when you have confidence that you have a winning system will you lose your fear. And then, use only a small portion of your account per trade (1% max) to reduce the risk of ruin and to make the losses easily manageable (from a physc standpoint and a real bank-account standpoint).

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  #110 (permalink)
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Retro View Post
If your strategies work than you'll be able to back-test them and auto-trade them. Back-testing is the ultimate solution to fear, after seeing your strategy trade thousands of times on historical data you gain confidence in it, and then automated trading takes care of the rest.

I highly recommend you start backtesting and auto trading via NinjaTrader or if you're not a programmer both TradeStation and IQBroker are monsters in back-testing and have easier languages you can quickly learn.

This is my view, but I realize that I have not seen it all.
Trade set ups that have nuance are very hard to automate. If code can be written for a backtest then I assume it can also be automated. But nuance may be left out. Nexgen has tried to automate their system with limited success. Their autotrader is profitable, but it cannot duplicate what successful traders can do. They have not been able to include the nuance. I know people who have back tested (by hand) other strategies that work, but have failed to create code to autotrade their methods successfully. The step from successful backtesting to autotrading is difficult. Any nuance may make that too difficult for most retail traders. Of course, we can't see what large institutions are doing. With large budgets and armies of Quants they may have succeeded here. I have seen many autotraders through Hotcom webinars but none are as good as a flesh and blood Master Trader. Many, however, look like they are profiatable. But if your goal is to Master the Art of Trading, autotrading is not the answer. One thing all of the autotraders I have seen have in common is Large Drawdown. Large Drawdown is not part of my trading plan.

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